Regional report: Steep drop in home ownership, rentals on the rise

Wednesday

Sep 18, 2013 at 3:19 PMSep 18, 2013 at 3:22 PM

By Leonard Sparks

CITY OF NEWBURGH – An uncertain job market and stingier banks are causing the region’s residents to postpone dreams of owning a home as the rental market booms, according to a report by Pattern for Progress’ Center for Housing Solutions.

Mortgage loan applications in a four-county region comprised of Dutchess, Orange, Rockland and Ulster counties plummeted by 80.5 five percent between 2005 and 2011, the report said. Loan applications fell by 85 percent in Orange and 78 percent in Ulster.

A dearth of high-paying jobs, high property taxes and burgeoning student loan debt are among the reasons many residents, including young adults, find themselves struggling to save for down payments or carrying too much debt to qualify for a mortgage.

“Keep in mind, homeownership is not for everyone - whether it is by choice or as a result of job loss or rising taxes,” said Joe Czajka, executive director of Pattern’s Center for Housing Solutions.

Pattern released its findings on Wednesday, ahead of the Center’s annual luncheon on Tuesday, when state Sen. Cecilia Tkaczyk and Assemblyman Keith Wright will be among those discussing the report in more detail.

Their jumping off point will be a housing market whose boom days of easy credit and lax lending standards fueled a bust from which the country is slowly recovering.

Those looking to buy now find themselves have to first hurdle tighter lending standards, financial insecurity and the difficulty of saving for a down payment and closing costs that could easily total $20,000, Pattern said.

Those between 18 and 34, called the Millennial generation, have an added burden: student debt whose repayment can have graduates paying $400 or more after they begin working. “They’re paying their bills, they’re paying student loans, there’s no money to save,” said Faith Piatt, executive director of the Orange County Rural Development Advisory Corp.

Many are opting to rent, creating a demand fueling the construction of new rental housing, like the 260-unit Orchard Hills apartment and townhome complex in the Town of Newburgh. Renting, either alone or with roommates, may even make sense for Millennials, leaving them freer to relocate for work without the burden of a house, Czajka said.

“This keeps them mobile and able to react to the changing economy,” he said.

Among its recommendations, Pattern calls for municipalities to “embrace” the shift from homeownership to renting, and to invest in infrastructure and streamline the approval process to spur development.

It is also recommending the creation of a federal tax credit program for renters. A credit could allow low-income renters to afford market-rate rents.